All Forum Posts by: Kurt Gardner

@Chris Mason - there were some changes because she had to find comps for 3BR duplexes instead of 2BR as she did in the first.  Again, she was given direction on the first appraisal to prepare this in an "as repaired" property and this included the contractor list of all the items we are going to do (one of the major items is add the 3rd BR to each side) and she didn't.

It speaks to her competence.  I brought that up - oh you better believe I lit into that appraisal over that and several other things about how inconsistent she was with her evaluation.  You may have better insight as to my course of action...I'm under the impression that the bank's hands are tied with merely ignoring her final valuation and going with the appraisal in the "un-penalized" amount.  If there were not the 20% knock on the comps, I'd be in tall cotton, but that's where I'm stuck.

She's just not really very good at her job, and I've tried to have her excluded from my future business dealings and from the second appraisal to no avail.

I still feel like I have an advocate with my banker, and she's fighting for me tooth and nail on this...she carries some weight there, but again, I don't know the regulations, and I'm hearing that they have gotten more difficult. 

I will review both and see if that section you've mentioned is checked on the second.  I remember seeing it on the first, but didn't think much of it.  Might be another good place to stand my ground against this.  Thanks!

@Chris Mason - that is the approach we took, and we could not pick who picked up the appraisal the second go around...it was the same appraiser.  she did the job we requested in the first place - provide us with an "as repaired" appraisal - and that did modify the value, however, she did not relent on the MS downgrade.

I have all parties on my side, except the mind of the appraiser, but because of the regulatory changes in the past year, the bank's hands are a bit tied on this...

I love my banker (she's a VP in the community bank where I do my business - they currently run about 7 branches, so they're medium in size).  She's a complete advocate for me and has pulled some miracles out for me before. 

Because we hold all of our business mortgages there, I feel like I may have some "final leverage" with them if they cannot rule in my favor to just take my business elsewhere.  I do not really want to do that at all.  I don't fancy myself that big of a fish, so it may not really be a factor.  It is really just aggravating.  I know my business well, and I've been successful for the past 3+ years scouring deals and working hard to make a business.  I don't like to be told "no" and I don't particularly like to be told no when all other agents are telling me "yes" except one obstinate, snooty-pants (did I just type that?).

*snort!

agree with @Tamara Elliott-Deering...you are not in the sweet spot on this one (from the guy who buys properties fairly lean, himself!).  All of my deals are below 70%, a couple are below 50%, but I do come close to the mark sometimes if it really intrigues me.

the seller is not in the driver's seat on this deal, and you will only hurt yourself by bending to their demands.  they owe $4k in back taxes and are trying to get out of a house that is decrepit.

YOU are the negotiator, and the fact that she is reaching back to you indicates that.  the problem is, she's probably so underwater, no amount of negotiating will help her at this point.  this will probably need to be negotiated as a short sale at best, and most likely picked up after foreclosure.

stick to your numbers...it's formulaic and it works...keep looking. 

@Tamara Elliott-Deering - yes, the bank uses a pool, and I got the same appraiser for the second go around...my banker (a good friend and investor, too) agrees with me this is a good deal (she has no hidden agenda - long time friend.  It's a profitable deal, just quirky).  It appraised fine to close the purchase.  I wanted to build in some fixer-upper funding so I can keep my cash.

I've done exactly what you suggested about stepping back and breathing, lol...I've breathed a lot!!  I'm really not terribly worried...I have enough cash reserves to perform the basic rehab I need on the property to get it up and going.  I would prefer not to use that and keep it all in the loan.  it's just a challenge.  There have been many new regulations in the past year that have tightened up the lending industry considerably, and that's where I'm getting stuck, I guess.

@Jason Hirko - it's funny...I've had some really great appraisers to work with on other purchases...very approachable and genuinely interested in being a professional AND working with me and the bank to get where we need to be.  Nothing unscrupulous, just fair business.  This particular person is new (she is only a year out of apprenticeship) and I think she has an agenda of "over protecting the bank's interest" as Tamara put it so she can keep in the pool and get jobs. 

Again, I get it...it's two obstinate hard heads going at it at this point, and I do not fancy losing! 

Slab has always cause me trouble when I do it myself, but when I have my contractor do it, I leave it up to them...

I don't think there's a solid answer because of the trim/custom sizes/other issues you may face for each door.

Personally, as long as my budget allows, the time savings of my contractor (and the overall "fresh" look) outweigh the cost of a pre-hung..and I'm usually only replacing 3-6 doors.

Now, if you're replacing 15+ doors...lol.

welcome @Tyler Williams!

I'm just up the road from you...I flipped one in Belleville on five forks a little while back, and I mostly buy and hold single family - Granite (4) and Collinsville (1).  I'm just getting my feet wet on a duplex in FVH now. 

This is a great place for some inspiration and advice...I'm happy to answer any questions you have if you need some local advice.

I had a duplex appraised to get a loan on purchase...it was requested that it be done in "as repaired" condition.  The report was returned with that verbiage on the cover, but there were "condition" downgrades based on some of the comps...fail #1.

Because the area I live in is over coal mines, we have mine subsidence issues (the appraiser had a 20% penalty on my valuation also because - while she isn't a structural engineer, there MIGHT be unseen damage - there might be termites and wood rot, too, but you don't see that either, right?)...to her credit, this particular area has had documented events.  I checked with the state and land folks in the know, and they reported that the specific event at this location had ended.  I had a structural engineer ($550) perform an assessment and they found no structural issues or problems due to subsidence.

Ordered a new appraisal armed with the structural engineer report...appraiser did estimate the property this time in "as repaired" condition (without any other monetary downgrades), but did not remove the mine subsidence 20% penalty...fail #2.

The reason this is a big deal is because the duplex needs some aesthetic improvements and we're adding a 3rd BR on each side to increase the rent potential/equity value.  It's lean, but the numbers are good (and it's my first duplex, so I'm a little emotionally involved, I confess).

Still...it seems like if there is documentation from the state insurance fund of subsidence ending in 2010, and I have a licensed structural engineer report indicating no damage/structural issues due to mine subsidence, what do I have to do to get this appraiser to remove that penalty?  According to her, the penalty range is 15-30%...why then would she even use 20%?  why not split the diff and use 22.5%?  Why not the full 30% or just 15%?  Why didn't the amount of the penalty change between the first and second appraisal with supporting documentation that states no further movement?

I'm frustrated because I don't guess I understand why/how with an admitted lack of knowledge about the subject, and in the face of professionals in the field, she STILL assess the penalty?

UGH...

Anybody else have appraiser issues?  Is there any recourse you could suggest (other than buy in cash!)?

Thanks for lending an ear...

Thx all.

@Dave Toelkes @Konstantin Ginzburg if I were to sustain the current agreement, I would require her to pay him half the deposit back as a term of the amendment to maintain the agreement.  If I give him half out of my pocket, I'd have to re-collect from her.  As @Roy N. pointed out I can use an amendment, and I may.  I feel like the rest of the advice about them qualifying together and she no longer being able to sustain the rent, will nix that option.

Intuition suggests  she is going to go back to her ex and will want to leave anyway, so most likely I will return the deposit to them in its entirety once that path is laid out, and they have vacated.  I am expecting a 30 day notice from her soon.

It is a shame, they are both good people, and they were good tenants.  On a positive note, their rent was below median market value for the property and I was wrestling with raising it.  

TADA!  Problem solved!

Thx, again everybody.

This is news to me today, so we haven't had the "can you afford this?" discussion...we've had them for almost two years and they're always on time.  I want her to stay.

I see the words "execute a change of lease"@Roy N. and "sign a new lease" @Tim Lindstrom.  Are these the same? 

FYI, I use smartkey locks...we just "reprogram" the key with a new key.  Brilliant system...totally worth the extra $10 bucks a set!

As long as you are not committing any mortgage fraud regarding occupancy or violating any municipal ordinances, once you own the property, I cannot see how he can keep any interest in the property other than nostalgic.

If he would like to remain in any control of the property, he will have to remain on the deed. 

What if you required special access due to some accident and retro-fitted the entire house for wheelchair access?

What if you were suddenly relocated with your job and turned over the property to an investor?

What if you just wanted more open space and hated the exterior paint?

In typical contracts, the seller has three days to cxl the deal for any reason, and also asserts that they are not under any duress when agreeing to the terms spelled out in the deal...if it is not written into the contract, it is probably not enforceable...

You said you're not buying from him, but if you did, I'd speculatively say he has no call once he hands you the keys.